Home prices and sales soar

Published: Tuesday, June 25, 2013 at 3:07 p.m.

Last Modified: Tuesday, June 25, 2013 at 3:07 p.m.

By the measure of an influential index, rising prices have now brought the housing market full circle.

Prices in the 20 cities tracked by the Standard & Poor's/Case-Shiller Index have now leapt to their level of early 2004 -- at the onset of an unprecedented run-up that was clipped when prices dove 50 percent to 60 percent in many areas.

The 20-city measure also had its largest monthly gains on record, another tangible sign that the housing industry's recovery is both broad and deep.

From Florida to California to New York, home prices last month topped expectations with the best monthly increase -- 2.5 percent -- since the index began tracking data in 2000.

Home prices in the 20 cities have now improved for 11 consecutive months. They also jumped 12.1 percent in April from a year earlier, which represented a seven-year best, according to the index data released Tuesday.

The sustained housing rebound -- the effects of which are being felt throughout Southwest Florida -- has accelerated in recent months as well, brought on by strong buyer demand and inventory levels flirting with 10-year lows.

"I have a lot of clients who are looking for properties and have lost out because of multiple offers," said Pat Mudgett, an agent with the Michael Saunders & Co. brokerage in Sarasota. "It really is a seller's market. There's demand out there, for sure, and prices are going up."

Tampa, the closest city to Sarasota-Bradenton in the Case-Shiller measure, saw its prices climb 1.7 percent over the month and 11.3 percent from the same time last year.

Miami, the only other Florida market included in the Case-Shiller index, had price hikes of 2.4 percent from March and 13 percent from April 2012.

Locally, 2,261 residential units were sold in Sarasota, Manatee and Charlotte counties last month, slightly outpacing the numbers from a robust April and soaring to their highest level since the mid-2000 boom, according to data from the three local Realtor associations.

At the same time, Sarasota's median sales price for a single-family home grew 19 percent over the year to reach $220,000 in May -- the highest value since August 2008. The median sales price for a single-family house in Manatee swelled 24 percent, to $217,000.

Fewer homes for sale

Most economists point to a consistent lack of supply as the primary reason for the steep price hikes.

Pent-up demand from retiring baby boomers and sustained interest from investors have thinned the inventory of houses for sale in Sarasota to three months' worth -- the time it would take to sell all of the homes for sale if no other homes were listed.

With new listings slow to enter the market, bidding wars among buyers have become routine and shaved the time most properties have sat on the market.

Nearly half of all U.S. homes sold in May were on the market for less than a month -- an unprecedentedly short shelf-life.

Institutional investors, meanwhile, such as Wall Street's Blackstone Group and Colony Capital, also have been paying well above market value for dozens of recent purchases, a Herald-Tribune analysis found.

As a result, some market observers fear the spike in prices is unsustainable.

"Residential real estate is now being controlled by institutions, and they're jacking up prices as high as they can get them," said Jack McCabe, a real estate consultant in Deerfield Beach. "It's artificially boosting values."

San Francisco, Las Vegas, Phoenix and Atlanta posted the largest yearly gains in the Case-Shiller index.

Those are the same markets where the investors have been the most active, McCabe said.

A dozen cities included in the report posted double- digit gains, and fully half of the 20 markets notched their best month-to-month increases on record.

Detroit was the only market tracked where prices did not rise from March to April.

Interest in new homes rises

The tight supply and rising prices have nudged buyers in many markets to look to new construction.

Sales of new single-family houses in May increased 2.1 percent from April and 29 percent from the same time last year. The median sales price of those homes was $263,900, according to data released Tuesday by the U.S. Census Bureau.

"Last week's comments from the Fed and the resulting sharp increase in Treasury yields sparked fears that rising mortgage rates will damage the housing rebound," David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.

"Home buyers have survived rising mortgage rates in the past, often by shifting from fixed rate to adjustable rate loans," Blitzer said.

"In the housing boom, bust and recovery, banks' credit quality standards were more important than the level of mortgage rates. The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue."

<p>By the measure of an influential index, rising prices have now brought the housing market full circle.</p><p>Prices in the 20 cities tracked by the Standard & Poor's/Case-Shiller Index have now leapt to their level of early 2004 -- at the onset of an unprecedented run-up that was clipped when prices dove 50 percent to 60 percent in many areas.</p><p>The 20-city measure also had its largest monthly gains on record, another tangible sign that the housing industry's recovery is both broad and deep.</p><p>From Florida to California to New York, home prices last month topped expectations with the best monthly increase -- 2.5 percent -- since the index began tracking data in 2000.</p><p>Home prices in the 20 cities have now improved for 11 consecutive months. They also jumped 12.1 percent in April from a year earlier, which represented a seven-year best, according to the index data released Tuesday.</p><p>The sustained housing rebound -- the effects of which are being felt throughout Southwest Florida -- has accelerated in recent months as well, brought on by strong buyer demand and inventory levels flirting with 10-year lows.</p><p>"I have a lot of clients who are looking for properties and have lost out because of multiple offers," said Pat Mudgett, an agent with the Michael Saunders & Co. brokerage in Sarasota. "It really is a seller's market. There's demand out there, for sure, and prices are going up."</p><p>Tampa, the closest city to Sarasota-Bradenton in the Case-Shiller measure, saw its prices climb 1.7 percent over the month and 11.3 percent from the same time last year.</p><p>Miami, the only other Florida market included in the Case-Shiller index, had price hikes of 2.4 percent from March and 13 percent from April 2012.</p><p>Locally, 2,261 residential units were sold in Sarasota, Manatee and Charlotte counties last month, slightly outpacing the numbers from a robust April and soaring to their highest level since the mid-2000 boom, according to data from the three local Realtor associations.</p><p>At the same time, Sarasota's median sales price for a single-family home grew 19 percent over the year to reach $220,000 in May -- the highest value since August 2008. The median sales price for a single-family house in Manatee swelled 24 percent, to $217,000.</p><p><b>Fewer homes for sale</p><p></b></p><p>Most economists point to a consistent lack of supply as the primary reason for the steep price hikes.</p><p>Pent-up demand from retiring baby boomers and sustained interest from investors have thinned the inventory of houses for sale in Sarasota to three months' worth -- the time it would take to sell all of the homes for sale if no other homes were listed.</p><p>Nationwide, supply in May stood at 5.1-months' worth, Realtor records show. Healthy markets typically contain six-months' worth of inventory.</p><p>With new listings slow to enter the market, bidding wars among buyers have become routine and shaved the time most properties have sat on the market.</p><p>Nearly half of all U.S. homes sold in May were on the market for less than a month -- an unprecedentedly short shelf-life.</p><p>Institutional investors, meanwhile, such as Wall Street's Blackstone Group and Colony Capital, also have been paying well above market value for dozens of recent purchases, a Herald-Tribune analysis found.</p><p>As a result, some market observers fear the spike in prices is unsustainable.</p><p>"Residential real estate is now being controlled by institutions, and they're jacking up prices as high as they can get them," said Jack McCabe, a real estate consultant in Deerfield Beach. "It's artificially boosting values."</p><p>San Francisco, Las Vegas, Phoenix and Atlanta posted the largest yearly gains in the Case-Shiller index.</p><p>Those are the same markets where the investors have been the most active, McCabe said.</p><p>A dozen cities included in the report posted double- digit gains, and fully half of the 20 markets notched their best month-to-month increases on record.</p><p>Detroit was the only market tracked where prices did not rise from March to April.</p><p><b>Interest in new homes rises</p><p></b></p><p>The tight supply and rising prices have nudged buyers in many markets to look to new construction.</p><p>Sales of new single-family houses in May increased 2.1 percent from April and 29 percent from the same time last year. The median sales price of those homes was $263,900, according to data released Tuesday by the U.S. Census Bureau.</p><p>"Last week's comments from the Fed and the resulting sharp increase in Treasury yields sparked fears that rising mortgage rates will damage the housing rebound," David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.</p><p>"Home buyers have survived rising mortgage rates in the past, often by shifting from fixed rate to adjustable rate loans," Blitzer said.</p><p>"In the housing boom, bust and recovery, banks' credit quality standards were more important than the level of mortgage rates. The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue."</p>